21 June 2023 , 10:08
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Martin Lewis has issued a warning to holidaymakers for a very simple mistake which could lose them money.
The Money Saving Expert took to our screens again on Tuesday night for the ITV Martin Lewis Money Show and he focused on all things holidays.
When jetting off abroad, Martin told viewers that it was always best to take out cash or pay with card in the local currency rather than converting into pound sterling.
Usually when you are paying something with your debit/ credit card or pulling out money from an ATM machine - you will be asked whether you want to be charged in pounds or the local currency such as Euros or dollars.
Many are not aware of the repercussions of the option you choose in this instance.
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If you press the option to convert into pounds then you may be paying more than you need to - this is because the markup cost is added for doing the conversion.
The Money Saving Expert explained: : "[The cash machine] says 'markup 4.5 percent', so they are adding a 4.5 percent load on top of the exchange rate.
"You do not want this machine to do the conversion for you.
"You want your card company at home to do the conversion because, even if it's not a good card, it's a better rate.
"Continue with conversion? No way, it's going to cost me 20 quid more than it should."
Martin also advised viewers to go for a specialist debit or credit card that offers a "near perfect" exchange rate.
The Money Saving Expert said he was a "massive fan" of these types of payment methods when spending abroad.
Martin explained: "What normally happens when you spend on plastic abroad is when you spend on the card, the bank or the card provider gets a near-perfect rate and they add a 3% non-sterling exchange rate fee.
"This means you get £100 worth of Euros, dollars, or dong , which is the Vietnamese currency before you think of anything more, but it costs you £103 because of the extra 3%.
"But the specialist cards don't add that three percent and you get the near-perfect rates that they do."
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The Money Saving Expert then shared which three which he described as "vying for best buy at the moment.
These cards included the Chase debit card, the Halifax Clarity credit card and the Barclaycard Rewards credit card.